Why I Just Made That Big Reversal on Income Investing

What do you mean, there’ll be no traditional dividends?Are you saying to sell dividend stocks?You were so excited about them in March. What happened?

So, I wanted to clarify: I’m not backtracking on the value of dividend stocks in a diversified portfolio. I was happy to see dividend stocks “lead the way out” of the February-March market crash. Not only because it paved the way for other stocks…but because I still recommend several Elite Dividend Payers, particularly in my large-cap portfolios.

I just want to remind you that these are unprecedented times.

Many investors suddenly lost their profits in the pandemic market – and many aspects of the global economy have yet to reopen for business.

It’s just that most dividend payouts aren’t big enough for any of that.

Let’s say you need $6,000 in income next month. That’s reasonable, right? In fact, I’m sure it sounds modest to many of you.

Well, to make $6,000 from dividends, you might need to invest $100,000…for a whole year. That would be a 6% yield.

And, to be frank, 6% in dividends alone is pretty darn good these days! (At least, from a stable company. Yield-seekers can find fatter payouts…but in an economic downturn, they often come from companies in a dangerous, desperate sort of position.)

If you follow me here at Market360 or my other newsletters, you’ll recall my goal with dividends is a little different. And it’s like the big fund managers on Wall Street play it: Use their payouts to help “smooth out” returns over time.

In other words, the dividend payout is more of a hedge against volatility. Not what pays your bills. Growth is what does that.

This is why, even when I recommend Elite Dividend Payers, I’m talking about growth stocks that also pay dividends.

People have used my quantitative system to invest in blue chip stocks, or to find small caps that can grow 10X. But now I’ve adjusted my proven investing analysis to focus on the stocks that are set to soar … like coiled springs … in just a short time period.

You won’t have to wait years for double- and even triple-digit returns with my Accelerated Income Project. I’ve designed it so you can get the income you need on a regular basis. And no: It doesn’t require using options or any “trick” investing.

So many investors have spent years getting lousy market returns and now they need a strategy to catch-up to live the life they’ve always dreamed. That’s what we’ll be discussing here in Market360, in this series of articles: Your Accelerated Income Guide.

Each day, we’ll be talking about how I find “accelerated income” stocks: the ones that can shoot up quickly … and provide you the extra income everyone can use … now more than ever.

Let’s look at a couple examples of stocks that signaled they were about to liftoff, to see what we can learn.

I said: “In the fourth quarter 2016, Baozun’s sales increased 25.2% year-over-year to $183.3 million, while earnings surged 358.8% year-over-year to $8.8 million. Earnings per share were $0.18, which topped analysts’ estimates by a penny. For the first quarter 2017, the analyst community is expecting 20.2% annual sales growth and 75% annual earnings growth. BZUN is a buy.”

I said: “The company is best-known for its strong position in the ADHD market, with drugs like Vyvanse, Intuniv and Adderall XR. In the fourth quarter, the company sales rose 12% to $1.33 billion and its operating earnings rose 36% to $2.26 per share compared with the same quarter a year ago. The company also provided positive sales and earnings guidance, and I want to use the recent dip that we’ve seen in the biotech sector as a chance to add Shire to the Buy List.”

Outcome: SHPG ⇧ 68% by July

SINA Corporation (SINA)

Country: China
Industry: Online Media
Buy Signal: Dec. 20, 2016

I said: “The company operates SINA.com (portal) and SINA.cn (mobile portal) as well as social media network, Weibo.com. During the third quarter, SINA reported a 21% increase in total revenues and a 21% jump in advertising revenues. Income from operations surged 147%. For the fourth quarter, the analyst community is expecting 60% annual earnings growth and 18.6% annual sales growth. Analysts have also revised their earnings estimates 19% higher in the past three months, so another quarterly earnings surprise is likely.”

Outcome: SINA ⇧ 23% two months later; up 41% from mid-May to June alone

If you’re like most investors, you’ve never heard much about those companies — if any.

This new buy is a 20-year-old pharmaceutical company that’s headed for 1,353% earnings growth this year. And that’s the conservative estimate!

Earnings was the confirmation I needed there…and for any other great growth play. Especially when so many other companies are struggling with profitability – and especially for The Accelerated Income Project.

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You've probably heard me say, "Our best offense is a strong defense of fundamentally superior stocks." In light of all the recent market gyrations, this statement rings even more true as the current third-quarter earnings season heats up. Today, I'll review three prime defensive plays that have just reported earnings, and my current advice for each stock: